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Could This Be The Wage Indicator? The Quits To Separation Ratio

In our last article on unemployment, we discussed the BLS's JOLTS survey, which attempts to characterize the job market by looking at the total supply of unemployed workers and the number of open jobs. In that article, we argued that the ratio (and its recent journey below 2.0 workers/job) portended good things for workers (more wages) and perhaps bad things for companies (compressed margins due to wage pressures).

The problem with that ratio? Sure, it reflects the economic mood, because like we mentioned - companies don't generally hire when times are very tough. Still, it's a bit removed from the animal spirits of the job market.

Today's ratio, as you can probably guess, isn't - we graph the ratio of 'Quits' to 'Total Separations' in the nonfarm sector.

The Quits to Separation Ratio

This ratio is interesting because instead of showing the economy from a corporation's perspective as in… Read More …